Kenneth Clarke, the Justice Secretary, will face a rebellion over his plans to
cut the legal aid budget spearheaded by former ministers who served in
previous Conservative governments.

Lord Tebbit, the arch-Thatcherite former employment secretary, and Lord Newton, who was social security minister under John Major, are among a powerful coalition of peers opposed to elements of moves to save £350 billion by severely limiting access to legal aid.

Mr Clarke has warned that the legal aid system – whose critics say has been abused for decades – is facing an "existential crisis" and needs a major shake-up.

Spending on legal aid is currently higher in England and Wales than anywhere else in the world.

He is proposing removing the right to obtain legal aid from a huge range of areas – including clinical negligence, debt, housing, welfare, employment and family disputes – including some domestic violence cases.

Mr Clarke and other ministers have cited a rise both in "compensation culture" and in activity by "no-win, no fee" lawyers as being behind the need for change.

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His plans, first revealed in The Sunday Telegraph in November 2010, have sparked serious controversy – and have already been hit by significant delays.

Opponents are increasingly confident the coalition will be forced to back down after a series of debates in the House of Lords over the next few weeks on the Legal Aid, Sentencing and Punishing of Offenders Bill.

Lord Tebbit and Lord Newton are among peers campaigning to save access to legal aid for children who are involved in medical negligence cases.

Campaigners say changing the law would hit youngsters such as Sophie Tyler, 17, of Risca, near Newport, South Wales, who was left paralysed from the waist down after a spinal anaesthetic was left in too long in a routine operation in 2008 Birmingham Children's Hospital admitted liability and apologised last year after a legal battle.

Other senior former Conservative ministers who oppose at least part of the Bill include Lord Mackay of Clashfern, who was Lord Chancellor for 10 years in the Thatcher and Major governments.

Lord Phillips of Sudbury said the majority of his fellow Liberal Democrat peers would either vote against the government or abstain.

He added: "We can reasonably expect major changes to the Bill at the report stage.

"There is no doubt that if the government doesn't make major concessions there will be amendments in the House of Lords and the government will lose. I promise you that."

He added there was "absolute agreement" among critics that social welfare law and domestic violence cases must remain within the scope of legal aid – and that it remains available for appeals."